Microsoft Canada Executive Summary
Microsoft Canada is preparing its marketing plan for the Xbox over the coming year. The Xbox was launched the previous year and positioned as the complete home entertainment solution combining video gaming, the Internet and DVD playback. The Xbox is the most robust gaming console on the market, but faces stiff competition in its product category.
The Sony Playstation 2 is the market leader with over 50% of the console market. Microsoft also faces competition from Nintendo and their GameCube. Microsoft’s goal is to become the market leader in the category by dethroning Sony.
In order to accomplish this goal Microsoft Canada must develop its marketing plan for 2002. Specifically, Microsoft must decide which target market to focus their efforts on. Specifically, they need to decide whether or not to continue focussing their attention on the male 16-24 year old “heavy gamer” which is also the target segment of Sony. Or, do they shift their focus to the lighter user and try to develop a niche strategy.
The backdrop of the targeting decision is how to position the Xbox. Microsoft could choose to position the system simply as the most powerful gaming console available, or they could also choose to focus on the complete functionality of the product including online gaming and DVD playback.
Considering the various opportunities and challenges, Microsoft should continue to focus its campaign on the heavy male user since this demographic are typically the trendsetters when it comes to the industry and are best equipped to appreciate the gaming advantages of the system.
By targeting this segment while focussing marketing efforts on the superior technology of the product along with the online gaming functionality, Microsoft should be able to differentiate itself from the Playstation by offering gamers a more technologically advanced gaming system with an online gaming feature not available from Sony.
Microsoft is faced with a key decision on how to market the Xbox product in the second year of its launch in Canada. Specifically, Microsoft needs to determine how to position the Xbox and which market segment they should target. The goal is to gain market share versus their competitors and most specifically Sony. Once positioning and target market are determined, Microsoft Canada must then decide how to best allocate their marketing budget to best reach goals.
Microsoft is currently one of the largest companies in the world with over $30 billion in annual revenues. Microsoft is also one of the best-known companies in the world, and its brand awareness is very high, as virtually everyone who has heard of a computer has heard of Microsoft.
While Microsoft has virtually cornered the market on PC operating systems and office application software, they had little to no experience in the home video game console market. In 1998 they partnered with Sega Enterprises...